In this course, you will learn about the role of operations and how they are connected to other business functions in manufacturing- and service-focused organizations. You will learn and practice the use of decision-making frameworks and techniques applicable at all levels, from management-level strategic decisions such as connecting process to the needs of various customer segments, to front-line tactical decisions such as choosing between ordering larger quantities vs. ordering more frequently.
Upon successful completion of this course, you will be able to:
• Understand the role of operations management
• Relate underlying principles to operations management frameworks and techniques
• Synthesize information to make strategic operations decisions
• Evaluate processes on different dimensions
• Apply analytical techniques for tactical operations decision
This course is part of the iMBA offered by the University of Illinois, a flexible, fully-accredited online MBA at an incredibly competitive price. For more information, please see onlinemba.illinois.edu.

OG

I love this course, even for not native speaker it's not to hard, only was not to easy to understand assignment questions and answers. But with google translate help I passed first module! :-)

FF

Nov 08, 2016

Filled StarFilled StarFilled StarFilled StarFilled Star

Very good course. Explanation is really clear, the topic is really on the spot and applicable. I am surprise to found that all the topic is really linked to my current and previous work.

Из урока

Module 3: Supply Chain

In this module we explore supply chains and discuss some of the important considerations associated with supply chain management. Using the example of coffee, we discuss the complexities associated with the design and management of supply chains. You will learn about issues arising from sourcing materials, logistics of moving and storing material, and information that is needed to manage the supply chain. You will also understand governance issues and the use of contracts, sustainability of supply chains, and the risks inherent in the workings of a supply chain. Because the sourcing of materials is a major function in supply chain management, you will learn about make-or-buy decisions and the theory of transaction cost economics that undergirds such decisions. Finally, you will learn about the bullwhip effect which explains the magnification of demand variability in a supply chain and the role of information in mitigating this problem.

Преподаватели

Udatta Palekar

Associate Professor

Текст видео

In this lesson, we are going to look at supply chains, and to do this, we're going to use the example of coffee. So, we're going to look at what a supply chain is, and what is involved in managing such supply chains. Most of us when we drink coffee, we don't think too hard about where the coffee comes from other than knowing that it comes from our favorite coffee place, which could be a chain or could be a very specialized coffee shop that only you and a few friends are aware of. But if you try to think back at where did this coffee actually come from, we have to sort of go back to the source. Where is it grown? Now, coffee is a plant that originated in Ethiopia and thrives primarily in the tropical and subtropical regions. So, therefore, expectedly, most of the coffee production happens in countries in those latitudes. Brazil for example, is the biggest grower of coffee followed by Vietnam. Then, as you see in the picture, there are large number of countries which grow coffee in those latitudes. There are two main kinds of coffee that are grown. One is called Robusta, it's the coffee that's used for probably, making the instant coffees. It tends to be a little bit more bitter, and is considered slightly a lower quality of coffee. The more popular and the more common coffee is the coffee Arabica. The Arabica is essentially the one that you find in gourmet stores, and is generally the coffee that most of us like to consume in the United States. Now, some countries grow Arabica exclusively. Some countries only grow Robusta, and many countries grow both. Coffee is very finicky. Coffee depends a lot on the soil, the temperature, the elevation at which it is grown, and so there are a number of reasons why certain countries are more able to grow coffee than other countries. Contrast that with where coffee is actually consumed, and what you notice is that, the heaviest consumption of coffee actually happens in the higher latitudes. These are the countries of Western Europe, Canada, the US, Russia, even where people tend to drink a lot of coffee. You could argue, of course, that they drink more coffee, A, because they have winters which are longer, and you need something to keep you awake, and B, it's colder out there, so a warm cup of coffee is actually something that you look forward to in the cold temperature. For a variety of reasons, coffee, because of where it grows, gets grown in one set of countries, and where it's consumed is a different set of countries. So, now this coffee from where it is grown has to be transported to where it is consumed, and that essentially means that we have to have a way to supply from the production side to the consumption side, and doing that a supplier requires what we call the supply chain. Let's take a step back and say, "What does it mean to take coffee, the product that is grown in this tropical countries, and what is it that we get as the final product?" The national Coffee Association has a list of 10 steps that coffee has to go through. Obviously, the first step is where coffee is produced, and we talked about where it actually is produced, that at the tropical countries. Once that coffee is grown, that coffee has to be picked. Coffee is a very, very finicky product, and so more often than not, because of the elevations at which it is grown, because of the delicate nature of the plants themselves, coffee is often hand-picked. There is a new development of having automated picking of coffee using machines which are beater bars that beat the bushes causing the coffee beans to drop, and they collect coffee beans that way. Once coffee is picked, by the way, I should also mention that there is a third way that coffee is collected. The most expensive coffee in the world actually is a coffee which is picked by animals called civets, and they eat the bean, and then when they excrete, they excrete the fruit and digest the bulk of the fruit, and then they excrete the bea, and then that bean is picked out, and that's some of the most expensive coffee in the world. There are reasons why, that is, because the civet only eats the best beans, and the acids in the civet's stomach actually make small changes to the bean, which is why the coffee becomes extremely, intensely flavored. Nonetheless, after the beans are picked, they have to be processed, which means the pulp has to be removed, so there are a couple of different processes to do that. There's a wet process, and there's a dry process. The dry process is where you dry the beans, and then try to get rid of the pulp part of the fruit. The wet process is where you ferment the bean, and then try to wash off the fermented pulp, so there's the processing step. That processing step is then followed by milling step, where there is a parchment layer on the bean which has to be removed. At that stage, you get what are called green beans. Green beans are what are usually exported by most producing countries. Those green beans are imported then, and then either large multinational companies or small boutique firms take those green beans, and then they go through a process called roasting where the beans are roasted. Roasting is a very intense process, it needs to be carefully monitored. Lots of variables have to be considered, and the flavor that you get from your coffee actually comes from the roasting process. Once the beans are roasted, you have a choice. They can either be packaged right away as beans, or they can be ground, and then packaged. So, you have roast and ground coffee, and you have roast beans. The roast beans obviously are then to be grounded by the consumer. So, once packaging is done, we have to go through a process of shipping. Once shipping is done, we have to go through a process where, either the consumer brews the coffee or you go to a coffee house or a coffee shop, and a barista brews the coffee. So, that's the brewing process, which also is critical in developing the taste of coffee. Then there is the final step of actually consuming the coffee. So, that's the coffee process in 10 steps. Now, as you can think about discovery process, there are several parts of it that could be done at multiple locations. So, let's look at the coffee supply chain schematic for a country like Germany. So, if you look at the diagram, on the left, you have the country where the coffee originates, it's the producing country. This may be large plantations or this may be small holder plantation, this might be small coffee plantations. If it's a large plantation, they may be large enough that they can ship directly via an importer into Germany. If it's a small holder, then the small holders may be part of a cooperative or an association which collects from a bunch of small holders or the small holder may sell to a trader. Either the trader or the Coffee Association will then sell to a sales agent who may then sell to an importer. Then, that coffee either which comes directly from the plantation through an importer or through a number of different intermediaries to the importer. May then go to a company, a large company like say Nestle, who may then be the roster. So, they're taking the coffee beans and then they roast the coffee. This roosted coffee is then either sent out for consumptions in home which means it has to go through a number of supermarkets. So, there might be retail chains or there might be specialized coffee shops or there might be web sales of this coffee. There's a particular brand of coffee that I like that comes from Brazil which takes a very torturous route to come to me. Because I have to order it on a website and it only ships to Brazil, so I have to ship it to a friend in Brazil and then somebody has to pick it and bring it for me whenever they go to Brazil. So, it gets complicated on how things actually reach the consumer. So, either it can reach a in-home consumer or it can be for out of home consumption, at a coffee shop or a restaurant or an office and so on. So, if you think in terms of something as simple as coffee, it goes through a number of different steps. As it goes through a number of different steps, one has to ask some questions. For example, when we look at the picture that we have put up, the coffee green beans are created and those green beans are shipped to Germany where they are roasted. Could the roasting not have been done in the producing country? Or why did we ship green beans? Why didn't we ship the coffee cherries or the coffee fruit and then do all the rest of the processing in German? So, even though there's a set of steps that we have identified and even though in this particular case, we see that there's a particular way that work has been segmented between the producing country and the consuming country, we still have to ask the question why was it done one way or the other? So, part of learning about supply chains is asking these questions. Let me show you the interesting fact that many of the countries which were high consumers in Northern Europe, actually are also exporters of coffee. A country like Germany that we just talked about imports green beans, but it also exports green beans. If you look at the exports of coffee, you notice that Germany exports 183,232 tons of coffee. Switzerland, tiny Switzerland exports 47,000 almost 48,000 tons of coffee. In terms of the value of the coffee that is exported, Switzerland happens to be number one. Close to $2 billion of coffee being exported by Switzerland. Now, why is this? So, what happens in these countries, for example, we mentioned Germany. Germany imports green beans and German coffee is well known. So, Germany is able to export the green beans because people who know that the German companies who import green beans look for quality green beans. So, they know that they can get quality green beans from those companies in Germany. So, the companies import green beans for local consumption, but they also export some of the green beans. Because there is a value that has been added to the bean by the simple association of the name of the company which imported those green beans. Knowing that they take care of quality, the value of the green bean is higher. Switzerland does something very different. The primary exporter in Switzerland is Nestle. Nestle makes the little Nespresso cups. These are extracted coffee and they are then shipped out to the rest of the world. Now, when you take coffee green beans and created extracted coffee, you add tremendous value because those tiny coffee cups are fairly expensive. So, a tremendous amount of value gets added which is why Switzerland even if it is not the largest exporter in terms of volume out of Europe, has the highest value for the coffee that it exports. This begs the question still as to why a lot of this is not done in the producing countries? I alluded to the reason when we talked about Germany. Because oftentimes, if things are produced in an African country, people are not sure that they can get the quality. So, they prefer to work through an intermediary country like Germany where the company in Germany makes sure that the quality is good and then they can send it out. There's also partly a historical reason why supply chains for coffee are the way they are. In that, the producers were often in colonized countries and the colonial powers were able to then buy these products and then convert them into value-added products and that relationship has continued. Because of the credibility associated with the companies in some of those Western European countries. So, here's an interesting diagram which shows what happens to coffee that's exported from many of the exporting countries and where does it go. So, if you look in this particular case, Germany which is a big importer of coffee, we said also it exports coffee, remember? But Germany which is a big importer of coffee imports mostly from Brazil and Vietnam. It imports some quantities from other countries and it then uses that to process. Now, the coffee that comes out of Vietnam is often robusta. So, that is used for instant coffees. So, these are extracted coffees and then the rest of it which is the arabica, is used for roasted and roast and ground. There are some times where people blend robusta and arabica to make a blend of coffee which has more slightly bitter flavors or more robust flavors. But it's interesting to see where the coffee comes from and how then it gets channeled to other countries.